Reminds me of another issue I heard about... a few years back here in Canada a large department store went bankrupt -- and had a sale off everything, starting at 20% but growing up to 70% near the end. However, the perfume companies did not want to see their product on sale at such discounts -- they felt it cheapened their image. So, rather than have that happen, they actually bought all their merchandise back from the store at full retail (not wholesale) price.

But no company likes to see their product sell for 1-5% above cost. It provides no incentive for the retailer themselves to provide support to their customers.